We investigate the relative dispersion and other time- and scale-dependent two-particle statistics of surface drifters in the Icelandic basin. The drifters, drogued at 15 m water depth, were released over the course of one week in May 2018 in a region of strong mesoscale activity. The release was carried out along the axis of a long-lived dipole of cyclonic and anticyclonic vorticity. The observed dynamics were heavily influenced by the mesoscale eddy field; multiple drifters remained within 100 km of their launch positions for up to 80 days, trapped inside an anticyclonic eddy. The relative dispersion exhibits the expected local and diffusive dispersion regimes for time scales between 2 - 20 days and more than 30 - 50 days, respectively. The non-local regime, while poorly resolved due to minimum initial separations of drifter chance pairs around 2 km, can be estimated to hold for approximately 1 - 2 days. Scale-dependent parameters reflect the scales of the largest eddies (50 - 100 km) that the drifters experience. High-resolution (2 km) hindcast simulations in ROMS are used to compare numerical and observed drifter statistics as well as evaluate the impact of the mesoscale eddy field and the mean flow on the relative dispersion and other parameters. Additionally, the Lagrangian velocity spectrum is analyzed directly for the observational and numerical datasets by performing a parametric fit to the turbulent background spectrum.